WASHINGTON, April 26 /PRNewswire/ -- The Clinton administration is working to make the U.S. Department of Housing and Urban Development (HUD) "a catalyst, not an obstacle," in finding solutions to nation's housing and community development problems, according to a department representative.
Terrence Duvernay, a HUD deputy secretary, discussed HUD's new focus at a forum here during the National Association of Realtors' Midyear Conference and Trade Exposition. Nearly 7,000 Realtors and guests are attending the April 23-28 conference.
According to Duvernay, HUD is committed to being an "agent of change" that will reorganize its programs so they effectively serve the needs for which they were created. "Reinventing HUD is our task," Duvernay said. Department officials plan to "transform uncoordinated programs" and "make (HUD) a problem-solving" deliverer of housing, he noted.
Duvernay addressed the department's efforts to expand the availability of single-family loans provided through the Federal Housing Administration's (FHA) mortgage insurance program, improve the preservation of low-income multifamily housing and increase enforcement of the federal fair housing law. Specifically, he said HUD is concerned over FHA's loss of mortgage financing activity, noting that the program currently has about 4 percent of the market share, compared to a 50 percent share years ago. "We must find a way to get FHA back" as a major mortgage insurer, Duvernay said.
Last year, NAR voiced concerns over FHA changes imposed by HUD that made the program less affordable and less usable for entry-level buyers. The changes, which essentially raised the closing costs, subsequently were repealed in NAR-supported housing legislation enacted late last year.
Currently, HUD is examining ways to simplify the loan-to-value ratios and mortgage insurance premium structure used in FHA underwriting, Duvernay said. In addition, the department is considering an increase in the mortgage insurance limit, which is now $151,725 in high-cost areas, he noted, adding that higher down payments may be tied to such an increase. "The (mortgage insurance) caps are a concern," he said. "We are looking at how and when they should be raised."
NAR has long supported tying the FHA mortgage insurance limit to local housing prices. Making this adjustment would allow FHA to reach buyers in areas such as the California coast and the Northeast, where home prices generally exceed the current mortgage insurance limit.
HUD is also seeking to step up preservation of low-income multifamily housing, through an increase in funding for the flexible subsidy program, Duvernay said. This is part of the department's focus on major rehabilitation of older, deteriorated units that could be used to help curtail the growing shortage of affordable housing for low- income residents.
He praised Realtors for their efforts in fighting housing discrimination. "You are part of the solution," Duvernay said. He noted that the department is planning to devote more resources to the

enforcement of the federal fair housing law. "We must address
what race continues to do ... in the denial of access to rental housing,
home ownership and loans," Duvernay said. "We are committed
to helping all people have the freedom to live wherever they
choose."

In subsidized housing situations, HUD is seeking to find a balance between fair housing enforcement and the screening of potential tenants to keep out those who might have criminal intentions, he said. "HUD must not discriminate, but we must find a way to weed out criminals," Duvernay said. The department has earmarked more funds to combat drug sales and other crimes in public housing projects and other HUD- supported communities, he noted. "We must confront destructive behavior and strengthen the social contract of rights and responsibilities," Duvernay said. The Clinton administration is shifting away from the previous administration's focus on enabling public housing tenants to purchase the units in which they live. According to Duvernay, the dilapidated condition of many public housing units would make them poor choices as for-purchase properties. "The idea of providing public housing residents with home ownership opportunities is important. But, letting them buy public housing probably is too ambitious a goal," he said.
HUD's fiscal 1994 budget calls for large funding cuts in the tenant ownership conversion program, known as HOPE, and simultaneously provides for substantial increases in HOME, a block grant program that supports affordable housing construction and rehabilitation. Duvernay said HUD aims to streamline and deregulate HOME so the funds can be distributed more efficiently to communities. "We must enable communities to develop in a way that works," he said, pointing out that the economic health of each locality is intertwined with that of other communities and the national economy.
Duvernay asked NAR members to assist HUD in rebuilding community spirit and improving housing conditions. "NAR and HUD share the goals of decent, affordable housing and fair housing opportunities for all," he said.
The National Association of Realtors, "The Voice for Real Estate," is the nation's largest trade association, representing nearly 750,000 members involved in all aspects of the real estate industry.
-0- 4/26/93
/CONTACT: Trisha Morris, 202-383-7560, or Liz Duncan, 202-383-1043, both of the National Association of Realtors/

CO: The National Association of Realtors ST: District of Columbia IN: SU:

PB-KD -- DC034 -- 1023 04/26/93 17:50 EDT

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